10.2 C
Tuesday, September 27, 2022
Home News Canadian Pacific acquires KCS to create the first US-Mexico-Canada rail network

Canadian Pacific acquires KCS to create the first US-Mexico-Canada rail network

The railway companies Canadian Pacific Railway Limited (CP) and Kansas City Southern (KCS) have entered into a merger agreement, under which CP will acquire KCS, creating the first single-line rail network to encompass the United States (US), Mexico and Canada.

The acquisition will be in a stock and cash transaction, representing an enterprise value of approximately US$31 billion, including the assumption of US$3.8 billion of outstanding KCS debt.

The combined entity will be named Canadian Pacific Kansas City (CPKC) and will offer new options for customers, economic growth as well as competition boost in Northern America, and estimated annualised synergies of approximately US$1 billion within three years, according to a statement.

"By combining, we will unlock the full potential of our networks and our people while providing industry-best service for our customers," claimed Keith Creel who will serve as the Chief Executive Officer of the new company.

Furthermore, the combination creates the first US-Mexico-Canada rail network with new single-line offerings that will deliver expanded market reach for CP and KCS customers, provide new competitive transportation options, and support North American economic growth, according to Creel.

In addition, the President and Chief Executive Officer of KCS, Patrick J. Ottensmeyer noted that the CP-KCS combination will not only benefit customers, labour partners, and shareholders through new, single-line transportation services, attractive synergies and complementary routes, it will also benefit KCS and its employees by enabling them to become part of a growing North American continental enterprise.

While remaining the smallest of six US Class 1 railroads by revenue, the combined company would have a much larger and more competitive network, operating approximately 20,000 miles of rail, employing close to 20,000 people, and generating total revenues of approximately US$8.7 billion based on 2020 actual revenues.

The Canadian town of Calgary will be the global headquarters of CPKC and Kansas City, Missouri, will be the headquarters for the US. Furthermore, the Mexico headquarters will be in Mexico City and Monterrey, while CP’s current US headquarters in Minneapolis - St. Paul will remain an important base of operations. Additionally, CP’s expanded Board will be joined by four KCS Directors.

Latest Posts

World’s largest container line MSC enters air cargo market

The world's largest container shipping company, MSC Mediterranean Shipping Company SA aims to enter the air freight market, starting the development of a new...

Ro-Ro cargo ship catches fire at port of Tacoma

Ro-Ro cargo ship Midnight Sun suffered a fire accident at the port of Tacoma in the United States on 22 September, while it was...

DP World London Gateway hits 10 million containers milestone

DP World London Gateway has handled its 10 millionth container, nine years after the logistics hub in the capital of the United Kingdom opened...

Maersk strengthens warehouse network in UK and Ireland

Maersk has announced the expansion of its warehousing network in the United Kingdom and Ireland with the signing of a lease for two new...

DNV, Singapore Institute of Technology ink maritime decarbonisation and digitalisation agreement

DNV has signed a Memorandum of Understanding (MOU) with the Singapore Institute of Technology (SIT) to explore opportunities to advance net-zero ambitions in Singapore’s...